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TMI Blog1965 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... qua the surplus income managed the property and derived the income on behalf of the kasupangudars and that the assessment should be made on the said managing trustee to the extent of the interest of each of the kasupangudars in the income received by him . Appeal dismissed. - - - - - Dated:- 8-4-1965 - Judge(s) : K. SUBBA RAO., J. C. SHAH., S. M. SIKRI JUDGMENT The judgment of the court was delivered by SUBBA RAO J.--In the town of Nagore in Tanjore District, Madras State, there is a Durgha consecrated to Hazerath Sayed Shahul Hameed Quadir Ali Ganja Savoy Andavar, who lived some 400 years ago. The said Durgha receives large income from immovable properties endowed to it and the offerings in cash and kind made by the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Appellate Tribunal took the same view. At the instance of the assessee, the Tribunal submitted the following question for the opinion of the High Court of Madras under section 66(1) of the Income-tax Act, 1922, hereinafter called the Act : "Whether the provisions of section 41 can be said to apply to the assessees in this case ?" A Division Bench of the High Court, which heard the reference, held that the managing trustee qua the surplus income managed the property and derived the income on behalf of the kasupangudars and that the assessment should be made on the said managing trustee to the extent of the interest of each of the kasupangudars in the income received by him. In the result it answered the question in the affirmati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of income, profits or gains chargeable under this Act, which the Courts of Wards, the Administrators-General, the Official Trustees or any receiver or manager (including any person whatever his designation who in fact manages property on behalf of another) appointed by or under any order of a court, or any trustee or trustees appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise (including the trustee or trustees under any Wakf deed which is valid under the Mussalman Wakf Validating Act, 1913) are entitled to receive on behalf of any person, the tax shall be levied upon and recoverable from such Court of Wards, Administrators-General, Official Trustee, receiver or manager or tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that passes through all of them is that they function legally or factually for others : they manage the property for the benefit of others. That the technical doctrine of vesting is not imported in the section is apparent from the fact that a trustee appointed under a trust deed is brought under the section though legally the property vests in him. In the case of a Muslim wakf the property vests in the Almighty ; even so the mutawallis are brought under the section. A reasonable interpretation of the section is that all the categories of persons mentioned therein are deemed to receive the income on behalf of another person or persons or manage the same for his or their benefit. None of them has any beneficial interest in the income ; he co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars have beneficial interests. The properties do not vest in them. They receive the income therefrom on behalf of both of them. After meeting the expenses of the Durgha they hold the balance on behalf of the kasupangudars and distribute the same in accordance with their shares. In this view, in terms of section 41 of the Act the nattamaigars are the managers of the properties on behalf of others and are entitled to receive the income therefrom on behalf of them. With the result, the income which they hold on behalf of the kasupangudars can be assessed only in their hands in the manner prescribed thereunder. But it is said that whatever may be the doctrine of Hindu or Mahommedan law, under the terms of the aforesaid scheme the properties ves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Lastly, a faint argument was raised to the effect that under the scheme the managing trustee was not appointed under any order of a court but was appointed by an agreement among the trustees. But in clause 4 of the scheme the High Court gave a specific direction that the managing trustee shall be elected from among the board of trustees. The managing trustee elected was certainly appointed under an order of a court, for the election was held pursuant to the order of the court. That apart, in the view we have taken, namely, that the nattamaigars are not trustees in the English sense of the term, this question does not arise for consideration. In the result, we hold that the High Court has rightly answered the question referred to it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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